It’s truly fucking astonishing this industry hasn’t been disrupted from top to bottom. Almost every single cost is a scam and you pay like 8% to sell a house! And it’s the biggest transaction of most peoples lives!
Take a $500,000 house. $30,000 to lol realtors for doing absolutely nothing. $2,000 in title insurance, complete waste. $500 for an appraisal, lol. Then we get to the mortgage, endless shenanigans. Not to mention the title company and their $1k for printing form documents and sending the money around. The whole process is just completely broken.
Right, I mean especially in this day and age, I feel like you actually get more help from a realtor on the buy side than on the sell side, which is pretty counterintuitive. But their incentives are ass backwards and you have to consider that at every step.
I mean, I guess for the average person getting help setting a price makes sense, but for someone intelligent who knows how to use the Internet, you can probably find some good price comps and figure it out yourself, and as long as you don’t undershoot by more than 6%, you come out ahead.
True, but this should not be that hard to negotiate. There are plenty of realtors around and they want the listing. They’re losing a tiny bit of freeroll but still getting a fine deal.
If the market is hot like it is in a lot of places, the pricing isn’t that important. If you list too low, you’ll just get multiple offers over asking and the ensuing bidding war should end with a price that is reflective of market value.
This is how it went with my private purchase. Neither of us had a lawyer, just had my lending company manage everything. Obviously more risk with that, depending on the relationship with the seller.
6% - with 3% going to the buying agent isn’t always the case any longer.
Listen to this scam - when we were buying a few years ago, we were ready to put in an offer and our agent asked us to sign a contract, formalize her as representative or whatever. She then said that if the buying agent share was less than 3%, that we had to make up the difference out of pocket. In the case of that house, the buying agent’s share was 2%, so if we bought the house, we had to pay her the 1% difference directly.
We LOLed out of that relationship real fast. I couldn’t believe it, I had never heard of such a thing. Ran it by a bunch of other agents and none of them had heard of it either.
I love our real estate agent. She is a type A personality Harvard educated mom that transitioned into the gig for flexibility but ends up working insanely hard for her clients because that is just the way she is wired. And we have a personal connection with her because my wife tutors her kid.
I would recommend that everyone just find someone like that.
When I bought a coop apartment I tried using a few agents and found them completely useless. They all knew less than me about the market, the neighborhoods, just about anything. The one thing I really needed help with was parsing the coop financials, and every last one of them was useless on that account (ultimately, I had to hire a lawyer for that). I would ask the RE agents questions I already knew the answer to, and they would be wrong over half the time. They didn’t provide a single benefit and were actually a hindrance to my search.
So I ended up going without one. Which meant that the sellers agent (who also bullshitted me about a dozen times) got a double commisson for doing nothing. He did give me a $15 bottle of white wine at the closing which I gave away to some appreciative kids on the subway ride home.
Anyone ever heard of a house where the buying agent share wasn’t 3%? What I’m getting at is what are the odds this agent said, “Hey, want to keep 4%? Give me a 0.5% kickback and I’ll officially give you 4% and take 2%!”
Then they both get 3.5% instead of 3%. Not sure how the kickback would be structured… Perhaps under the table, perhaps in some weird transaction.
Scummy way to boost her earnings 17% on her buy-side transactions.
I don’t know if it’s super common everywhere but it definitely happens in New England - when I went to sell a prior house I told prospective agents I wasn’t paying 6%, they were still interested in doing it at 5-5.5%, but they’d say things like that would affect photo quality or fewer ads or whatever (like any of that really matters). After that incident with the agent - who we got rid of - I asked around and for the buyer agent 2.5% wasn’t uncommon and 2% was rare but happened.
I would bet right now, with a hot buying market, there are more houses under 3% for the buyer.
I just googled quickly and the first hit was for this Texas Real Estate Firm which talks about offering a buyer agent 3%, and it mentions the issue I ran into:
You can make it less desirable for the buyer.
Agents who notice the lower commission offered have a written agreement with their buyers that guarantees the agent a 3% commission. The buyer then has to pay his agent the difference in the commission. The buyer ends up needing to pay more than expected. It’s just more complicated and tends to annoy the buyer and potentially can ruin the deal.
That’s what happened with me, as we didn’t put in the offer and fired the agent. Dumping that on us when we wanted to send in an offer (rather than when we first started working with her, this was probably the 5th or 6th house we had seen together and she never mentioned it) was pretty scummy.
I got a letter that my mortgage servicing is being transferred to Ally effective 2/1/22. I made the payment due in January to the old servicer. I have heard absolutely nothing from Ally. I really don’t want to spend a bunch of time calling Ally and figuring out how to pay them because that should not be my responsibility. Any recommendations here?
iirc it is federal law that you can send the payment to your previous servicer for up to 60 days and they can’t charge you late fees or anything. They will just forward the payment on for you. That’s what was on the notice I got I think, I refinanced and took some cash out back in October, and my mortgage company just sold mine to Freddie Mac. I’ll double check when I get home tonight.